Jaguar Mining Inc.

Headnote

Related party transaction -- issuer issued senior secured convertible debentures to a related party pursuant to a private placement -- the subscription by the related party is a "related party transaction" under MI 61-101 and is subject to minority approval requirements -- disinterested shareholders who are not "interested parties" will provide written consent to the proposed related party transaction, representing approximately 54.05% of the common shares held by all minority shareholders -- disinterested shareholders are all accredited investors -- approval of the transaction by majority of minority shareholders at a shareholders' meeting would be foregone conclusion -- issuer will provide disinterested shareholders with a copy of the disclosure document considering the transaction and will send a copy to any shareholder who requests it -- issuer will disclose details of the transaction in a material change report and in a disclosure document filed on SEDAR no less than 10 days prior to the closing of the proposed transaction -- exemption from holding shareholders' meeting and formal delivery of information circular granted.

Applicable Legislative Provisions

Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions, ss. 5.6, 8.1, 9.1.

Companion Policy 61-101CP to Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions, s. 3.1.

June 3, 2015

IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO (the Jurisdiction) AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF JAGUAR MINING INC. (the Issuer)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Issuer for a decision under the securities legislation of the Jurisdiction (the Legislation) that the Issuer be granted an exemption pursuant to section 9.1 of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (MI 61-101) from the requirements in MI 61-101 that the Issuer call a shareholders' meeting to consider a proposed related party transaction (the Proposed Transaction, as defined below) and send an information circular to shareholders in connection with such meeting (the Requested Relief).

Under the process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

(a) the Ontario Securities Commission (the Decision Maker) is the principal regulator for this application, and

(b) the Issuer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in Québec.

Interpretation

Terms defined in National Instrument 14-101 Definitions, MI 11-102 and MI 61-101 have the same meaning if used in this decision, unless otherwise defined.

Representations

The decision is based on the following facts represented by the Issuer:

1. The Issuer is a corporation existing under the laws of the Province of Ontario. The principal executive office of the Issuer is located at 67 Yonge Street, Suite 1203, Toronto, Ontario M5E 1J8.

2. The Issuer is a reporting issuer in the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia, PEI and Newfoundland, and is not in default of securities legislation in any such jurisdiction.

3. The Issuer's authorized capital consists of an unlimited number of common shares (the Common Shares). Each Common Share carries the right to one vote at all meetings of shareholders of the Issuer. As of the date hereof, the Issuer's issued and outstanding share capital consists of 111,111,038 Common Shares.

4. The Issuer's Common Shares are listed on the TSX Venture Exchange under the symbol "JAG".

5. The Issuer intends to issue approximately US$16,000,000 principal amount of senior secured convertible debentures (the Debentures) on a non-brokered private placement basis (the Offering). Subject to obtaining requisite approvals, including approval of the board of directors of the Issuer (the Board), the Issuer may increase the size of the Offering up to US$20,000,000.

6. The Offering was disclosed in a press release dated February 27, 2015, and revised terms of the Offering were disclosed in a press release dated May 4, 2015.

7. The net proceeds of the Offering are intended to be used by the Issuer to repay the US$9.4 million outstanding under the credit facility (the Renvest Credit Facility) held by Renvest Global Resource Fund c/o Renvest Mercantile Bancorp Inc. and for general corporate purposes.

8. An insider of the Issuer, Outrider Management, LLC (Outrider Management), which holds 36,045,291 Common Shares (representing approximately 32.4% of the issued and outstanding Common Shares) through a fund it manages, Outrider Master Fund, L.P., intends to subscribe for 5,000 Debentures for an aggregate subscription amount of US$5,000,000 in order to maintain its pro-rata interest in the Issuer (the Proposed Transaction). The Proposed Transaction forms part of, and shall be on the same terms as the Offering.

9. In December 2014, a special committee comprised of four directors of the Issuer (the Special Committee) was established to initiate a strategic review process to explore alternatives for the enhancement of shareholder value. The completion of the Offering is subject to the Special Committee's final approval and recommendation of the Offering (including the Proposed Transaction) to the Board, and the Board's subsequent approval of the Offering (including the Proposed Transaction), which is expected to occur on or about June 8, 2015.

10. Mr. Stephen Hope, a director of the Issuer and member of the Special Committee, is not considered to be an "independent director" (as defined in MI 61-101) as it relates to the Proposed Transaction, as he is a principal and therefore, an "issuer insider" (as defined in MI 61-101) of Outrider Management. Mr. Hope has, and will continue to, recuse himself from deliberations by the Special Committee and the Board relating to the Proposed Transaction.

11. The remaining three members of the Special Committee are "independent directors" (as defined in MI 61-101) as it relates to the Proposed Transaction.

12. Following the completion of the Proposed Transaction, assuming the conversion of the 5,000 Debentures purchased by Outrider Management under the Offering, the holdings of Outrider Management would increase by 24,900,000 Common Shares,{1} representing a change from approximately 32.4% of the issued and outstanding Common Shares to (i) approximately 44.8% of all issued and outstanding Common Shares on a partially-diluted basis (i.e., giving effect only to the conversion of the 5,000 Debentures held by Outrider Management following the Offering), and (ii) approximately 31.9% of all issued and outstanding common shares on a fully-diluted basis (i.e., giving effect to the conversion of 16,000 Debentures, which would represent all of the Debentures following the closing of the Offering, assuming that the size of the Offering is not increased).

13. Since each of Outrider Management and Mr. Hope are a "related party" of the Issuer as at the date that the Proposed Transaction was agreed to, the Proposed Transaction will constitute a "related party transaction" within the meaning of MI 61-101 and, consequently, MI 61-101 requires that the Issuer obtain a formal valuation for, and minority approval of, the Proposed Transaction, in the absence of exemptions therefrom.

14. Implementation of the Proposed Transaction is exempt from the formal valuation requirement of MI 61-101 pursuant to section 5.5(b) of MI 61-101. However, there are no available exemptions from the minority approval requirements of MI 61-101 for the Proposed Transaction.

15. To effect the Proposed Transaction, the Issuer will be required to obtain "minority approval" (as defined in MI 61-101) (Minority Approval), calculated in accordance with the terms of Part 8 of MI 61-101. Subject to obtaining the exemptive relief requested herein, the Issuer intends to obtain such Minority Approval by way of written consent.

16. As of the date hereof, 75,065,747 Common Shares, or approximately 67.6% of the Common Shares, are held by shareholders of the Issuer who are not "interested parties" to the Proposed Transaction.

17. The Issuer anticipates that certain disinterested minority shareholders will consent (collectively, the Consenting Parties and each, individually, is a Consenting Party) in writing to the Proposed Transaction. The Issuer understands that such Consenting Parties hold Common Shares representing, in the aggregate, approximately 35.6% of the issued and outstanding Common Shares and approximately 54.04% of the total number of issued and outstanding Common Shares held by disinterested minority shareholders. Such approval is in excess of the simple majority requirement in MI 61-101 for purposes of obtaining Minority Approval.

18. Each of the Consenting Parties are sophisticated investors and satisfy the "accredited investor" requirements set forth in section 1.1 of National Instrument 45-106 Prospectus Exemptions.

19. While certain of the Consenting Parties are participating in the Offering, no Consenting Party is: (i) an "interested party" (as such term is defined in MI 61-101), (ii) a related party of an interested party, unless the related party meets that description solely in its capacity as a director or senior officer of one or more entities that are neither interested parties nor issuer insiders of the Issuer, or (iii) a joint actor with a person or company referred to in (i) or (ii) with respect to the Proposed Transaction.

20. Another insider of the Issuer, Dupont Capital Management Corp. (Dupont Capital), which holds 12,037,763 Common Shares (representing approximately 10.83% of the issued and outstanding Common Shares) through a fund it manages, intends to subscribe for 1,500 Debentures for an aggregate subscription amount of US$1,500,000 (the Dupont Subscription).

21. Although the Dupont Subscription constitutes a "related party transaction" under MI 61-101, implementation of the Dupont Subscription is exempt from (i) the formal valuation requirement of MI 61-101 pursuant to section 5.5(b) of MI 61-101, and (ii) the "minority approval" requirement of MI 61-101 pursuant to section 5.7(b) of MI 61-101.

22. While the Dupont Subscription and the Proposed Transaction may technically be considered "connected transactions" under MI 61-101, the Issuer concluded that it is not required to exclude the votes attached to the Common Shares held by Dupont Capital on the basis that, in addition to satisfying the criteria set forth in paragraph 19 above, the Dupont Subscription and the Proposed Transaction are separate transactions that have been entered into with the Issuer at arm's length, and neither subscription is conditional on the completion of the other.

23. The Consenting Parties from whom written consent for the Proposed Transaction is sought will be provided with a disclosure document pertaining to the Proposed Transaction (the Disclosure Document), the contents of which comply with the disclosure requirements set out in section 5.3(3) of MI 61-101, along with a form of written consent (the Consent) seeking their approval of the Proposed Transaction, prior to providing their Consent. The Disclosure Document and Consent will provide the relevant details of the Proposed Transaction and include an acknowledgement that the Disclosure Document describes the Proposed Transaction in sufficient detail to allow shareholders to make an informed decision regarding approval of the Proposed Transaction.

24. The Disclosure Document and Consent was publicly filed on SEDAR on June 2, 2015.

25. A material change report pertaining to the Proposed Transaction, the contents of which shall comply with the disclosure requirements contained in section 5.2 of MI 61-101 ("Material Change Report"), was publicly filed on SEDAR on June 2, 2015, at the same time as the Disclosure Document and the Consent.

26. The Proposed Transaction and the Offering shall close not less than 10 days following the filing of the Disclosure Document, Consent and Material Change Report on SEDAR.

27. A copy of the Disclosure Document will be sent to any shareholder who requests a copy.

28. The Proposed Transaction and the Offering are currently expected to close on or about June 12, 2015.

29. A Consenting Party may revoke its Consent until the period of 10 days has elapsed from the date the Disclosure Document is posted on SEDAR, and will be notified of its revocation right by the Issuer.

Decision

The Decision Maker is satisfied that the decision meets the test set out in the Legislation for the Requested Relief.

The decision of the Decision Maker is that the Requested Relief is granted provided that:

(a) Minority Approval shall have been obtained by written consent;

(b) the Proposed Transaction and the Offering will have been approved by the Special Committee and Board of the Issuer;

(c) each Consenting Party receives a copy of the Consent and Disclosure Document;

(d) the Disclosure Document discloses that:

(i) Minority Approval will be obtained by way of written consent;

(ii) written consent will be obtained from the Consenting Parties; and

(iii) the Issuer has applied for the Requested Relief;

(e) the Disclosure Document, the Consent, the Material Change Report and any other required disclosure documents are filed on SEDAR no less than 10 prior to the closing of the Offering and Proposed Transaction;

(f) a Consenting Party may revoke its Consent until the period of 10 days has elapsed from the date the Disclosure Document is posted on SEDAR, and will be notified of its revocation right by the Issuer; and

(g) each Consenting Party receives a copy of this decision.

"Naizam Kanji"

Director, Office of Mergers & Acquisitions

Ontario Securities Commission

{1} Based on a conversion rate of 4,980 Common Shares per $1,000 principal amount of Debentures, based on the Canadian dollar to U.S. dollar exchange rate of 0.8030 on May 29, 2015.